Abstract:I explore the effect of skill-biased technological change on long-run inequality using a theoretical
model where the supply of skilled and unskilled workers, the cost of education, and credit rationin...I explore the effect of skill-biased technological change on long-run inequality using a theoretical
model where the supply of skilled and unskilled workers, the cost of education, and credit rationing
are endogenous. I show that the existence of unequal steady states does not depend on the degree
of technological skill bias, but on the credit market, the cost of education, altruism, and the
overall growth rate of the economy. However, when unequal steady states exist, economies with a
higher technological skill bias have a greater long-run inequality. Therefore, skill-bias technological
change is a second-order determinant of long-run inequality: a higher technological skill bias is
associated with greater long-run inequality only if long-run inequality exists; the existence of long-run inequality does not depend on skill bias.Read More
Publication Year: 2010
Publication Date: 2010-06-01
Language: en
Type: article
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Cited By Count: 1
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